KARACHI: Global ratings agency Fitch on Tuesday upgraded Pakistan鈥檚 foreign currency credit rating to 鈥楤-鈥� from 鈥楥CC+鈥� citing increased confidence in the country鈥檚 progress on narrowing its budget deficits, with Prime Minister Shehbaz Sharif hailing it as a sign of the world鈥檚 growing confidence in Pakistan鈥檚 economy. 

The upgrade reflects confidence that the country would implement structural reforms, supporting its International Monetary Fund (IMF) program performance and funding availability, Fitch said.

The agency said though ongoing global trade tensions could create external pressures on Pakistan, its low dependence on exports and market financing should mitigate risks.

鈥淧rime Minister Shehbaz Sharif welcomes the improvement in Pakistan鈥檚 economic rating by global credit rating company Fitch,鈥� a statement by the premier鈥檚 office said. 

鈥淭he improvement in the rating of Pakistan鈥檚 economy by international institutions is a manifestation of economic development and the confidence of the world community in Pakistan鈥檚 economy,鈥� he added. 

Sharif said his government is working 鈥渢irelessly鈥� to further improve Pakistan鈥檚 economy. 

Pakistan鈥檚 economy had been teetering on the brink of a sovereign default ever since inflation rose to a record high of 38 percent in May 2023 and reserves started declining rapidly. 

However, Pakistan鈥檚 economy was provided breathing space thanks in part to a $7 billion bailout program from the International Monetary Fund (IMF).

In March, the IMF reached a new deal with Pakistan which could unlock $1.3 billion in cash. 

Sharif鈥檚 government has vowed to implement the financial reforms, which include increasing the country鈥檚 tax base and privatizing loss-making entities to ensure sustainable growth.